66. Daniel Jaye – starting it all with Engage

Paleo Ad Tech

Daniel Jaye was co-founder in 1995 of Engage, a pioneer in bringing database marketing to the internet. A competitor of DoubleClick, Engage built arguably the largest database of pseudonymous profiles at the time, and Daniel and his team created innovative technologies for ETL, large-scale analytics and behavioral targeting.

Daniel was also the man behind much of the technical resourcefulness of the ad network Tacoda. In 2010, he co-founded another technically ingenious startup called Korrelate, an ad attribution solution.

Today he is CEO Aqfer, a marketing data plataform-as-a-service company based in Florida.

An astrophysicist inspired by Tom Swift stories in his youth, Daniel began his adult journey in management consulting and then joined Epsilon, where he worked on an early pen-based PDA before enlisting at Fidelity.

At the time — as Daniel tells Marty in this erudite episode — there were two companies pushing the boundaries of data management: Walmart (supporting scale) and Fidelity (supporting complexity). At Fidelity, Daniel’s job was to run its Teradata-based massively-parallel processing (MPP) environment.

In this era before Hadoop, Daniel developed a global reputation as a cross-platform high-scale data management expert. This reputation reached the ear of David Wetherell, the energetic CEO of CMGi, and Wetherell approached Daniel with a compelling (if rather vague) idea: “Bring database marketing to the internet.”

It was 1995. Netscape was one year old.

At the time, CMGi — the name stood for College Marketing Group Inc. — had a database of consumers linked to their book- and magazine-buying behaviors. So it could be used to tie people to their areas of interest and serve marketers. Seizing the opportunity of the nascent internet, Wetherell used some smart acquisitions to amass a warchest to fund a successful venture arm and an operating division to build its own ideas.

At its peak during the dot-com boom, CMGI was a massive holding company with a roster of storied internet brands: Lycos (search engine), GeoCities (web hosting), Planet Direct (portals), FlyCast (ad network), AdKnowledge (ad server), etc. It eventually had 5,000 employees and $1.5 billion revenue and was #7-9 in terms of web traffic to its properties. The New England Patriots’ stadium was called CMGi Field.

Daniel became CMGi’s acting CTO with the proto-database project as his day job. The company was based at Brickstone Square in Andover, Mass.

After a privacy audit during his time at Fidelity, Daniel realized that there was actually no need to have personally-identifiable information (PII) to do the analytical work for database marketing: segmentation and list management. PII could be appended later, but it was not needed for analysis.

“That’s what actually inspired online profiling,” he recalls. “We could raise the bar versus traditional direct mail because we did not need to know who you are in the real world in order to make … advertising and content relevant to you based on your interests.”

So Engage was built on the Fidelity-inspired direct mail idea to build anonymous profiles, plus cookies.

Daniel’s first technical challenge was scale, handling clickstream data and data from portfolio partners like Lycos. “I knew that the tools didn’t exist,” he admits. So he had to build them.

He ended up crafting three products:

• The first parallel-ETL tool for data processing

• An analytics tool for discovery and iteration

• Interest-based anonymous profiles (which they called “cybertargeting”)

At the end of 18 months, the tools were real. The first (called Engage Fusion) and the second (Engage Discover) were soon sold to the data warehousing company Redbrick for about $10 million. CMGi kept cybertargeting, which became Engage.

Engage’s solution for cybertargeting could process log data and online event data — and then create cookie-based profiles to target and measure marketing campaigns and analyze web traffic.

By 1998, DoubleClick had gone public and CMGI wanted to get into the ad serving game. It acquired Accipiter for $35 million, a rival of the on-premise ad server NetGravity (later acquired by DoubleClick).

In the spirit of building things that don’t exist, Daniel also filed what may well have been the first patent for cookie-synching. So while PaleoAdTech’s friend Lou Montulli may have invented the cookie at Netscape, Daniel says, “I am the inventor of all the evil uses of cookies [wink].”

There was also an algorithm that determined peoples’ interests from their browsing behavior and, eventually, got at various levels of interest.

While Engage now offered an integrated data and ad server platform, it had challenges. It was difficult (aka impossible) to build an internet data-selling business until the real-time bidding era a decade later, when Exelate and BlueKai realized Engage’s original data-network dream.

There was the persistent, rarely-discussed problem of decaying profiles and stale data. So while at one point Engage may have had 130 million unique profiles in its database, only a portion of them were actually useful.

CMGi went public in 1999, launched its own ad network called AudienceNet (combining Accipter and Engage profile data), and was hammered of course by the dot-com meltdown that began in 2000, laying off staff and selling assets. For various dot-com financing reasons, the company didn’t have the cash to endure and eventually dissolved.

After an exciting interlude at Tacoda — which we will (Marty hopes) discuss in a future episode [in the meantime, enjoy this previous episode with Tacoda’s founder Dave Morgan], — Daniel resurfaced in 2010 with Korrelate, an ad analytics company. It emerged from an problem related to AOL’s acquisition of Tacoda: how to get AOL’s other properties, like Ads.com, to work with it.

Daniel’s solution included a forerunner of header bidding he called federated RTB (sold to Operative Media) and Korrelate, which tied digital clickstream data to offline events like sales. It performed online-to-offline attribution.

Korrelate could tie ad impressions to offline sales — for example, partnering with Polk for DMV registration data, — as well as give marketers insights into the impact of their digital channels on sales. In this way, General Motors learned that their online form wasn’t nearly as powerful as their configurator for predicting sales.

Ultimately, Korrelate couldn’t compete with Datalogix, which sold media targeting data and provided its measurement service like Korrelate’s for free.

“We were competing with free,” he says. “And I learned my lesson then about selling analytics standalone.”

Korrelate ran into trouble in 2014 and was sold to JD Power.

Today at Aqfer, Jaye says, he’s still in a position to make use of his prolific technical imagination.

“What I do,” he says, “is I sell the technology that I’ve had to build in every company … as a platform.”